MGM CEO Hornbuckle Says Genting Macau Bid Viable

MGM Resorts International (NYSE: MGM) CEO Bill Hornbuckle said the gaming company views Genting Malaysia’s effort to procure a Macau license as credible.

MGM CEO Bill Hornbuckle. He says the company is taking seriously Genting’s efforts to enter Macau. (Image: Wall Street Journal)

In an interview with CNBC from the Global Gaming Expo (G2E) in Las Vegas earlier this week, Hornbuckle said MGM, which owns 56% of MGM China, is taking “very seriously” Genting’s proposal to enter Macau. The Malaysian gaming behemoth is the seventh bidder vying for six gaming permits in the special administrative region (SAR) with the other six being the established concessionaires.

Genting stunned the gaming world a month ago, revealing plans to compete for one of the six Macau permits. Much of the shock was attributable to the fact Macau authorities said just six licenses would be granted in the retendering process, prompting analysts and industry observers to speculate the established operators there would be reapproved without surprise.

Those six are Galaxy Entertainment, Melco Resorts & Entertainment (NASDAQ: MLCO), MGM China, Sands China, SJM Holdings, and Wynn Macau. Each of those companies submitted bids to renew their Macau permits.

Hornbuckle Says MGM China Taking Appropriate Steps

Genting has the Asia-Pacific operating experience and financial resources to further solidify the credibility of its Macau bid. Moreover, the operator excels in non-gaming amenities and experiences — something Macau authorities are prioritizing. Hornbuckle said MGM is up to the task.

We are answering the government’s calls about diversification, about entertainment, about tourism, and the kinds of things we think are going to drive that market in the future. And the government has its own choice to make, when this process is over,” he said in the CNBC interview at G2E.

The MGM boss expressed confidence in his company’s Macau proposal and in those of the other concessionaires, noting the six established concessionaires have been good stewards in the local community and were proactive in helping employees and vendors during the worst days of the coronavirus pandemic.

Genting and MGM have some history, albeit rumored. In July, it was reported the Bellagio operator held talks with the Lim family about acquiring Genting Singapore, which owns Resorts World Sentosa — one of two integrated resorts in the city-state. No deal was reached.

Genting a Wildcard to Be Taken Seriously

While initial consensus appears to be the six concessionaires are in strong positions to have their Macau permits renewed, it would be hasty to dismiss the legitimacy of Genting’s bid because analysts see multiple avenues for the company’s entry into the Chinese territory.

The most conventional and least controversial would be by financially backing an ailing operator — perhaps SJM Holdings — or an outright acquisition.

Some analysts take the situation a step further, noting that Macau, at the behest of Beijing, could leverage current US/China geopolitical friction to boot one of the three US-based concessionaires, replacing that company with Genting. That’s a complex, controversial option, and one officials may not want to pursue with the SAR’s economy still slumping due to the pandemic.

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